Ex-GE engineer charged with stealing trade secrets for China

ALBANY, N.Y. — A former General Electric engineer and his business partner in China were indicted Tuesday on charges they stole the company's trade secrets from a New York plant for the Chinese government in what federal prosecutors called "a textbook example" of industrial espionage.

The Department of Justice announced that Xiaoqing Zheng, 56, of Niskayuna, New York, and Zhaoxi Zhang, 47, of Liaoning Province, China, were charged with economic espionage and conspiracy for stealing GE's turbine technologies for China.

Zheng was working for Boston-based GE's power division in Schenectady when he was arrested at his home last summer. FBI agents raided his suburban home and removed computers, cash and other items. Zhang, the business partner, wasn't charged at the time.

Prosecutors allege that Zheng stole computer files dealing with GE's gas and steam turbines and sent them to Zhang, who's in China.

The thefts are "a textbook example of the Chinese government's strategy to rob American companies of their intellectual property and to replicate their products in Chinese factories," said Assistant Attorney General for National Security John Demers.

GE said at the time of Zheng's arrest that it was co-operating with the investigation.

Zheng was arraigned in federal court in Albany on Tuesday and allowed to remain free on the $200,000 bond he posted after his arrest on Aug. 1, 2018. His lawyer, Kevin Luibrand, said he wasn't commenting on the charges.

According to the 14-count indictment, Zheng specialized in sealing technology at GE and used his access to company files to grab proprietary information and email it to Zhang, who is Zheng's nephew. The two men received financial support from the Chinese government and co-ordinated with government officials to enter into research agreements with Chinese state-owned institutions to develop turbine technologies, prosecutors said.

"When such technology is stolen it can be devastating to U.S. businesses and can result in American workers losing jobs," said FBI Assistant Director John Brown. "China continues to support behaviour that violates the rule of law."

An email seeking comment on the indictment was sent to the Chinese embassy in Washington, D.C.

President Donald Trump has accused China of using predatory tactics to try to overtake U.S. technological dominance in various industries. Chinese officials have rejected the allegations while complaining that Washington's aim is to cripple a rising economic competitor.

In October, the Justice Department charged an operative of China's Ministry of State Security with attempting to steal trade secrets from GE Aviation and other aerospace companies. At the time the charges were made in Cincinnati, Ohio, Demers said the case was a "significant economic espionage matter" and the latest proof China is trying to steal information from American companies.